The Finance 202: Trump aides set aggressive tax overhaul timetable

Mark this on your calendar in pencil: The Trump administration expects a tax overhaul to hit fast-forward once lawmakers return in September, with the tax-writing committees marking up bills in September to set the stage for House passage in October and Senate action in November.

“That’s aggressive, but it’s our schedule,” Marc Short, Trump’s top lobbyist, said at a Monday event on taxes hosted by Freedom Partners and Americans for Prosperity, both of the Koch brothers’ political network.

The Trump team has been setting and missing aggressive deadlines on the matter since last year. In late December, then-incoming-and-since-outgoing White House chief of staff Reince Priebus said the administration envisioned tackling an overhaul in two stages, with a smaller package leading a bigger one that Trump would sign by the end of April. By March, with the Obamacare debate bogging down in the House, Treasury Secretary Steven Mnuchin pushed that back. Trump would sign a sweeping tax overhaul into law before the August recess, he told Fox Business News’s Neil Cavuto. “I think that’s a very aggressive timetable, but realistic and something that the president and I are very committed to doing,” Mnuchin said.

About six weeks later — with House GOP leaders struggling to revive a health-care push that had collapsed in the meantime — Mnuchin again was forced to amend expectations for progress on taxes. He told the Financial Times he rated the August deadline as “highly aggressive to not realistic at this point.”

But as recently as early July, administration and congressional negotiators still aimed to forge consensus by August on a framework for rewriting the tax code. “We expect to have come to internal agreement on a framework for tax reform, so that legislation can be drafted during the August recess that we can roll out in early September, beginning the legislative process,” White House spokeswoman Natalie Strom told Bloomberg on July 10.

Instead, last Thursday, Republican leaders released a six-paragraph statement with no numbers and no specifics — besides a long-brewing, formal acknowledgment that they are no longer considering a border adjustment tax.

Steve Bannon. (Jim Watson/AFP)

So tax-writers have their work cut out as they begin drafting bills this month.

Among other fundamental decisions they still need to make about the scope and structure of an overhaul, they’ll also need to sift through some mixed signals from principals on both ends of Pennsylvania Avenue.

While Stephen K. Bannon, Trump’s chief strategist, wants to raise taxes on the highest-income earners — an idea that got a soft endorsement from Trump last week — Short and House Ways and Means Committee Chairman Kevin Brady (R-Texas) have doused it with cold water in recent days. On another front, Short said Monday that the White House still would like to slash the rate for business income to 15 percent; but Senate Finance Committee Chairman Orrin G. Hatch (R-Utah) told Reuters on Monday that policymakers will have a hard enough time getting that rate down to 25 percent. And while White House budget director Mick Mulvaney maintains, with Trump’s apparent backing, that the administration wants Senate Republicans to remain focused on a health-care package, senior members of the chamber made clear Monday that they are ready to move on taxes.

In other words, policymakers need to come to a common understanding of where they stand now and where they intend to head before they can traverse the distance between the two.

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— Adding a multimillion-dollar insult to Anthony Scaramucci's injury, it appears the ousted White House communications director will not be able to use his brief stint in public service to avoid capital gains taxes on the sale of his hedge fund, SkyBridge Capital. The Mooch had been seeking a certificate of divestiture from the Office of Government Ethics that would have allowed him to defer his tax burden, but as of Monday, he hadn't received one.

It's not clear he was eligible anyway, since the privilege is meant for incoming officials who are forced to divest an asset to avoid a conflict of interest. Scaramucci announced the sale of SkyBridge back in January, and he didn't join the administration until June (as an adviser to the Export-Import Bank). "It's meant to help mitigate a loss, not provide a business benefit," said Jordan Libowitz, spokesman for Citizens for Responsibility and Ethics in Washington, which on Friday joined with a handful of other groups on a letter to the OGE challenging Scaramucci's request.

— The Post's Abby Phillip, John Wagner and Damian Paletta write that the firing announced the John Kelly era on the new chief of staff's first day on the job: "Trump’s willingness to dismiss Scaramucci — whom he hired just 10 days ago — was viewed by many in the West Wing as an indication that he is eager to impose order and is giving Kelly the tools to do so."

Twitter reacted to Scaramucci's dismissal:

From The Post's Paul Farhi:

To summarize: Spicer quit because of Scaramucci, who took down Priebus, who was replaced by Kelly, who took down Scaramucci.

— SCOOP: President Trump last month overruled advisers who wanted Donald Trump Jr. to offer a truthful statement ahead of revelations about his June 2016 meeting with Russian representatives. Instead, the president "personally dictated a statement in which Trump Jr. said that he and the Russian lawyer had 'primarily discussed a program about the adoption of Russian children'" according to a report that posted last night from The Post's Ashley Parker, Carol D. Leonnig, Philip Rucker and Tom Hamburger.

The move could place Trump in legal trouble. More from the story: "The extent of the president’s personal intervention in his son’s response, the details of which have not previously been reported, adds to a series of actions that Trump has taken that some advisers fear could place him and some members of his inner circle in legal jeopardy. As special counsel Robert S. Mueller III looks into potential obstruction of justice as part of his broader investigation of Russian interference in the 2016 election, these advisers worry that the president’s direct involvement leaves him needlessly vulnerable to allegations of a coverup."

— Trump on Monday imposed sanctions on Venezuelan President Nicolás Maduro for his recent power grab.The Post's Anthony Faiola and Heather Long: "Despite the tough talk from the White House, the sanctions fell short of the crippling pressure many observers were expecting. Maduro swiftly dismissed the measures... Potentially more-sweeping measures — including the targeting of Venezuela’s all-important oil industry — are still on the table. But the opposition here is running out of time to turn the tide, and is now facing new and significant threats."

— Earnings call transcripts show companies are a lot more worried about the threat posed by Amazon than any other risk factor, including all the chaos out of Washington. Bloomberg's Julie Verhage: "The expanding online behemoth has morphed from a retail category killer to a much broader enterprise that now competes with everything from high-end grocers to technology developers. It’s safe to say corporate America has taken notice -- and is increasingly concerned about the competition."

Federal Reserve Vice Chairman Stanley Fischer said political and economic uncertainty has contributed to slow economic growth in the U.S. and around the world.

Bloomberg

POCKET CHANGE

Lloyd Blankfein. (John Moore/Getty Images)

— Goldman Sachs has been rattled by its trading performance in the first half of the year, which trailed that of other major banks for the first time since it went public in 1999. The Wall Street Journal's Liz Hoffman: "The slump has rattled executives, sparking a charm offensive designed to showcase a more customer-friendly Goldman, focused on solving clients’ problems rather than steering them into trades that benefit the firm’s bottom line. It has also tipped the scales in favor of more immediate action at the firm, despite a yearslong debate around whether changing market conditions were temporary or deep-rooted and how aggressively Goldman should respond to them."

The Wisconsin governor ordered the state legislature back into special session on Tuesday to consider an incentive package that would award Taiwanese electronics manufacturer Foxconn $3 billion over 15 years in mostly cash incentives and waive several state environmental reviews.

Reuters

MONEY ON THE HILL

President Trump. (AP Photo/Alex Brandon, File)

— Trump will hit the road to help sell a tax code rewrite. Reuters: Specifically, Trump could travel to some Midwest states like Michigan and Wisconsin that he won during the 2016 presidential campaign but are still represented by Democrats in Congress. 'In terms of travel, I think you will see him out there more ... in the states where we need votes,' said Marc Short, the White House's legislative liaison."

— Trump remains committed to working with Congress on an infrastructure bill, his administration said, even as the schedule for action looked likely to slip to next year. The Hill's Melanie Zanona: "One of Trump's chief campaign promises was to upgrade U.S. roads, bridges, airports and other public works. Trump outlined broad infrastructure principles in his budget request this spring, but a more detailed legislative package is not expected to be released until at least this fall."

THE REGULATORS

Richard Cordray. (Reuters/Jonathan Ernst)

— House Financial Services Committee Chairman Jeb Hensarling (R-Tex.) wants the feds to investigate whether Richard Cordray, director of the Consumer Financial Protection Bureau, is running a simultaneous and illegal campaign for Ohio governor. Jeremy Pelzer of cleveland.com reports: "In a letter to [U.S. Acting Special Counsel Adam] Miles, Hensarling pointed to media reports that Ohio Supreme Court Justice Bill O'Neill was contacted by an unnamed mutual friend of Cordray's earlier this month stating that Cordray is planning to run for governor and asking whether O'Neill would remain out of the Democratic gubernatorial primary."

— If Cordray steps down, Mnuchin could replace him. Ballard Spahr’s Alan Kaplinsky writes: “Treasury Secretary Mnuchin would be the obvious and logical person to serve as Acting Director. It should be noted that the Dodd-Frank Act authorized the Treasury Secretary “to perform the functions of the Bureau under this subtitle until the Director of the Bureau is confirmed by the Senate.” The fact that Congress considered the Treasury Secretary to be the appropriate person to run the CFPB until a Director was confirmed provides strong support for Secretary Mnuchin’s appointment to serve as Acting Director.”

There’s good news and bad news for the Consumer Financial Protection Bureau’s new arbitration rule. On the positive side, the Office of the Comptroller of the Currency doesn’t plan to stand in the way of the rule being implemented, as the OCC recently threatened to do. On the other hand, the OCC isn’t planning to intervene in the arbitration rule situation because Congress is currently in the process of repealing the rule.

— Commerce Secretary Wilbur Ross writes in an op-ed out this morning from the Wall Street Journal that our trading partners should practice what they preach when it comes to free trade: “In addition to tariffs, both China and Europe enforce formidable nontariff trade barriers against imports. Examples include onerous and opaque procedures for registering and gaining certification for imports; unscientific sanitary rules, especially with regard to agricultural goods; requirements that companies build local factories; and forced technology transfers. The list goes on.”

— Steven Glickman, a senior economic adviser in the Obama administration and co-founder of the Economic Innovation Group, sees encouraging signs in the congressional Democrats’ new "Better Deal" agenda, “a thinly-veiled return to the party’s early 20th century progressive roots” with “the potential to plant the seeds for a retro-reboot that Democrats desperately need.” But he says the party needs to go further.

CHART TOPPER

From The Post's Philip Bump: Trump may not love his poll numbers today:

DAYBOOK

(Photo by Zach Gibson/Getty Images)

Today

The Senate Finance Committee will hold a hearing on challenges and solutions to the housing crisis.

Coming Up

The American Bar Association holds an event the common cross-border issues in M&A and Tax Planning on Wednesday.

The Brookings Institution holds an event on the procedure and politics in the 115th Congress on Wednesday.

The Senate Finance Committee holds a hearing on various nominations on Thursday.